The pensions in 2023 could be indexed by 14% even if the rate of inflation is 30%, said Minister of Labor and Social Protection Marcel Spatari. According to him, the indexation of pensions according to the rate of inflation is a too heavy burden for the country’s budget when there is no economic growth. The Government’s priority in 2023 is to raise the salaries of public sector employees so that these could maintain the purchasing power, IPN reports.
In accordance with the legislation, the indexation of pensions in 2023 should be in accordance with the rate of inflation at the end of 2022. Earlier, the National Bank warned that as the rate of inflation at the end of this year will be about 30%, the indexation of pensions in April 2023 based on the current law will be a difficult task for the authorities. Minister Marcel Spatari admits that the state cannot adjust the pensions to the rate of inflation.
“This is very expensive and we can be short of money for fully indexing the pensions, by 30%. A 30% rise when the economy is stagnant and the social contributions from which pensions are paid do not grow is unaffordable. The pension system should maintain itself. Those who work and pay contributions transfer money to the social insurance budget from where pensions are paid. The pensions are indexed annually to keep the purchasing power. However, if the collected amounts do not grow, we will have to look for money elsewhere to be able to index by 30%, as the law provides, and the social insurance budget deficit will rise this way,” Marcel Spatari stated in the program “Résumé with Ileana Pîrgaru” on RliveTV channel.
According to the minister, the Government now aims to increase the salaries of public sector employees who are unable to keep pace with the price rises.
“Increasing the salaries is now the top priority and this should happen from the start of 2023 as the salaries in the public sector the past few years increased insignificantly. The pensions, especially the small ones, were favored, while the salaries remained much behind the inflation. Since the current Government took over, the cumulative inflation has been about 40%, while the salaries in the period grew less, by up to 15% cumulatively,” said Marcel Spatari.
He noted that the state can now index the pensions by 14%. However, the authorities bank on foreign assistance in ensuring more consistent indexation.
“If we analyze the situation strictly based on the social insurance budget form which pensions are paid, these can be raised by 14%, which is the budget growth pace. If the Ministry of Finance does not identify money somewhere else, from other projects, the minimum value of indexation will be 14% as the amounts collected into the budget grew as much,” said the minister.
In April 2022, the pension indexation coefficient was 13.94% and was calculated based on the rate of inflation at the end of 2021.
